Most emerging market currencies have probably seen the best of a lukewarm year against the dollar as U.S. President Donald Trump is expected to back-pedal on his conciliatory tone from the recent G20 summit, a Reuters poll showed on Friday.

Emerging market currencies have had a relatively resilient year despite a long list of risks, such as elections in South Africa and fractured relations between the United States with trading partners from China to Turkey.

The poll, taken in the past week, suggested emerging market currencies will lose the gains held since the year began.

South Africa’s rand is expected to lose almost 4% to 14.50/$, Russia’s rouble about 2.5% to 65.00/$, and India’s rupee about 2% to 70.00/$.

These currencies staged a mild recovery after the Group of 20 summit in Japan, where Trump offered some concessions in the trade spat with China. But analysts are not convinced that will last.

“We think that the recovery will come to an end, as Trump inevitably relapses into protectionist talk and downside risks to Chinese and U.S. growth materialise,” said Francesca Beausang, senior economist at Continuum Economics.

“The (current) recovery for emerging market currencies is driven by a resurgence of risk-on sentiment given the more conciliatory tone struck by U.S. President Trump at the G20, especially vis-à-vis China,” added Beausang.

Representatives from the United States and China are organising a resumption of talks for next week to try to resolve the year-long trade war between the world’s two largest economies, Trump administration officials said on Wednesday.

LIMITS TO GAINS

The Federal Reserve has signalled interest rate cuts could come soon, partly due to uncertainty caused by the trade war and several emerging markets’ central banks have either embarked on easing or are on the road to do so.

Still, interest rates in some of these economies will still be high enough to attract capital inflows. In South Africa on Thursday the rand broke through the psychological 14/$ level, its strongest in two-and-a-half months.

Annabel Bishop, chief economist at Investec, noted that while the rand is likely to continue to gain from perceptions - and occurrence - of global monetary easing, third quarter trading always tends to show risk-off sentiment.

“In particular, fears of slowing global economic growth have impacted markets, and could limit emerging market currencies’ gain in the third quarter,” she said.

Domestic politics could also become a bigger risk factor as the second half of 2019 progresses, especially in Latin America.

Brazil’s controversial pension reform plan goes to crunch time this month, while Argentina moves towards October’s general election in an increasingly bitter campaign over economic matters such as the future of its stand-by credit line with the International Monetary Fund.

Last month, a similar survey suggested investors will be more cautious and selective in making risky bets against a strong dollar in coming months as fears over the United States’ aggressive trade policy rattles markets.